|Quoting RickNRoll (Thread starter):|
The US Government is using the American taxpayer to provide the necessary guarantees.
The export-import bank does use the large financial capacity of the treasury to support its loans. The treasury has more capital than private firms and can back bigger loans.
However it doesn't use taxpayer money. The export-import bank earns a profit. It's earned about $5 Billion over the last 10 years that went straight to the US treasury. By essentially being the largest bank in the world, it can make large loans that private sector companies can't take the risk on at reasonable rates.
Whether or not the export-import bank is fair is a different question. US companies complain that it is unfair and props up foreign airlines by giving them access to lower finance rates. Foreign companies say it gives US companies an unfair advantage. That's a WTO ruling. Saying that it uses taxpayer funds to support a deal to Lion Air is not correct. The export-import bank just assumes risk for a loan that is made in the private sector using private sector funds (for the most part). It earns a fee for doing this. It's common in the finance industry to sell the risk of a loan. It gets down to the whole concept of insurance.
The largest airline leasing companies are backed by huge capital sources. ILFC is backed by AIG and GECAS is by GE
. They need large sources of money to back up the large loans. The export-import bank is an extension of the idea. Taxpayers win because of the export-import bank irregardless of jobs created to specific industries. I'm all for the treasury earning money and financing itself. It has to pay for all the treasury loans anyway that make up the deficit.
[Edited 2012-02-22 15:44:02]
If you have never designed an airplane part before, let the real designers do the work!